Tag: payments

Longtime Apple Pay holdout CVS will finally be adding support for Apple’s mobile payments platform this fall, along with 7-Eleven, Apple CEO Tim Cook said this afternoon on the company’s earnings call. The news is particularly notable because CVS was one of the first major retailers to snub Apple Pay, choosing instead to launch its own barcode-based mobile payments solution “CVS Pay” back in 2016, following the failure of the retailer-backed Apple Pay rival CurrentC.

CVS Pay had become the first mobile payments solution the pharmacy chain adopted, after having purposefully avoided support for Apple Pay or any other rival NFC (tap to pay) technologies at its register. The company believed there was value in offering its own end-to-end solution to customers that combined both payments and loyalty, it had said.

In addition, CVS had earlier backed an Apple Pay alternative called CurrentC, which was developed by the merchant consortium MCX, led by major retailers like Walmart, Best Buy, Rite Aid and others. The QR code-based payments solution was designed to challenge Apple’s potential dominance in mobile payments. Many of the retailers even blocked Apple Pay at their stores in advance of bringing CurrentC to market.

However, CurrentC eventually failed and the technology was sold off to JPMorgan Chase in 2017. Some of its backers — like Best Buy and Rite Aid — had also relented, by allowing Apple Pay into their stores. But CVS did not. It instead moved forward with its own solution.

That it has now decided to also support Apple Pay is a major win for Apple, as is the addition of 7-Eleven to the list of retailers that will soon offer Apple Pay at checkout.

The retail expansions weren’t the only big Apple Pay news announced on the call.

Cook also said that Apple Pay would launch in Germany — but didn’t offer a timeframe for this launch beyond “later this year.” And he noted that Apple Pay saw more than 1 billion transactions in the third quarter of 2018. That’s triple the number from a year ago, and more mobile transactions than Square and PayPal, he noted.

The news follows a new forecast released by Juniper Research which now estimates Apple’s Pay will account for 1 in 2 contactless mobile wallet users (in OEM-provided wallets) by 2020.

With its expansions, Apple Pay’s global traction is growing. The service is now live in 24 markets worldwide, with more than 4,900 bank partners. Apple Pay will also go live on eBay in the U.S., Cook said, as previously announced by eBay last week.

Line, the company best-known for its popular Asian messaging app, is doubling down on games after it acquired a controlling stake in Korean studio NextFloor for an undisclosed amount.

NextFloor, which has produced titles like Dragon Flight and Destiny Child, will be merged with Line’s games division to form the Line Games subsidiary. Dragon Flight has racked up 14 million users since its 2012 launch — it clocked $1 million in daily revenue at peak. Destiny Child, a newer release in 2016, topped the charts in Korea and has been popular in Japan, North America and beyond.

But, despite revenue success, Line has struggled to become a global messaging giant. The big guns WhatsApp and Facebook Messenger have in excess of one billion monthly users each, while Line has been stuck around the 200 million mark for some time. Most of its numbers are from just four countries: Japan, Taiwan, Thailand and Indonesia. While it has been able to tap those markets with additional services like ride-hailing and payments, it is certainly under pressure from those more internationally successful competitors.

With that in mind, doubling down on games makes sense and Line said it plans to focus on non-mobile platforms, which will include the Nintendo Switch among others consoles, from the second half of this year.

Ebay announced this morning it will begin accepting Apple Pay on its marketplace starting this fall, and has also teamed up with Square Capital on seller financing. The changes come following eBay’s further distancing from longtime partner PayPal, which included the company’s switch to Adyen as its primary payments processing partner, announced earlier this year.

At the time, eBay said PayPal would continue to be an option at checkout, by Adyen would become the default over time.

Now eBay is adding one more option to the mix with support for Apple Pay – something the company refers to as “the first step” in offering its tens of millions of buyers more choice in terms of their payment options. eBay’s statements indicate Apple Pay is one of several options still to come, as it’s referred to as being “among the first forms of payment” the marketplace has planned.

The Apple Pay rollout will begin this fall in the U.S. on a limited scale, allowing buyers to purchase using Apple Pay in iOS and Safari in order to check out both on the mobile web and in eBay’s app.

“Apple Pay is one of the most ubiquitous forms of payments and provides users with an easy, fast and secure way to pay,” said Steve Fisher, Senior Vice President of Payments at eBay, in a statement. “Offering Apple Pay as a form of payment on eBay is the first step in providing more choice and flexibility in payment options to our tens of millions of buyers.”

The company’s shift to its new payments experience will continue in 2019, and it expects to have the majority of its marketplace shifted by 2021. Along the way, Apple Pay will become available to more customers across more inventory and in more regions worldwide.

Related to this, eBay also announced today a new partnership with Square Capital to help U.S. sellers with financing to grow their businesses.

Sellers will be able to apply for $500 up to $100,000 of financing for any business need, including things like payroll, inventory, marketing, or equipment, among other things. eBay stresses the importance of offering selling working capital, citing a small business survey that found 70 percent of small businesses didn’t receive the funding they wanted.

Square Capital’s system for offering financing only involves a few steps, instead of filling out longer loan forms. And once approved, the funds can reach sellers in as little as one business day. Meanwhile, the borrowing cost never changes during the life of the loan, so sellers know what they can expect in terms of payments.

Square has been offering loans since 2014, facilitating $2.8 billion to over 180,000 businesses in the process. In 2016, it began offering loans to businesses outside of Square’s own ecosystem, through its partnership program.

“Expanding access to capital, including to those who have been underserved when seeking funding, is core to Square’s purpose of economic empowerment,” said Jacqueline Reses, Head of Square Capital . “Square Capital understands the needs of small businesses and facilitates a simple, seamless funding experience. We’re proud to partner with eBay and enable more sellers across the U.S. to invest in growing their business.”

Ebay says select sellers will begin to receive emailed invitations to apply for Square Capital loans starting in the third quarter of 2018.

PayPal spun out from eBay in 2015, to become its own publicly traded company – a move eBay’s board said would benefit both companies, allowing them to grow in their respective markets.

PayPal, as of late, has been making a huge push for international growth and other expansions, with the acquisitions of iZettle, the “Square of Europe” and Hyperwallet, while also shoring up its product with AI, thanks to the acquisitions of AI-based prediction platform Jetlore and AI-based fraud and risk management firm Simility.

Ebay, meanwhile, has been making changes of its own, with its switch to Adyen. The hope is now that adding a suite of other payment options will give customers more ways to pay, which in turn would increase conversions and therefore eBay’s bottom line.

The marketplace giant recently posted a slight miss on second quarter revenues – $2.64 billion instead of the estimated $2.66 billion, but sales were up 9 percent over the year-ago quarter. In addition, eBay said its user base of active buyers was growing, having reached 175 million up from 171 million in the first quarter, and up from 167 million in the year-ago quarter. That leaves room for the company to capitalize on these payments changes going forward.

In a blog post announcing the opt-in trial yesterday, Brave says it’s started “voluntary testing” of the ad model before it scales up to additional user trials.

These first tests involve around 250 “pre-packaged ads” being shown to trial volunteers via a dedicated version of the Brave browser that’s both loaded with the ads and capable of tracking users’ browsing behavior.

The startup signed up Dow Jones Media Group as a partner for the trial-based ad content back in April.

People interested in joining these trials are being asked to contact its Early Access group — via community.brave.com.

Brave says the test is intended to analyze user interactions to generate test data for training its on-device machine learning algorithms. So while its ultimate goal for the BAT platform is to be able to deliver ads without eroding individual users’ privacy via this kind of invasive tracking, the test phase does involve “a detailed log” of browsing activity being sent to it.

Though Brave also specifies: “Brave will not share this information, and users can leave this test at any time by switching off this feature or using a regular version of Brave (which never logs user browsing data to any server).”

“Once we’re satisfied with the performance of the ad system, Brave ads will be shown directly in the browser in a private channel to users who consent to see them. When the Brave ad system becomes widely available, users will receive 70% of the gross ad revenue, while preserving their privacy,” it adds.

The key privacy-by-design shift Brave is working towards is moving ad targeting from a cloud-based ad exchange to the local device where users can control their own interactions with marketing content, and don’t have to give up personal data to a chain of opaque third parties (armed with hooks and data-sucking pipes) in order to do so.

Local device ad targeting will work by Brave pushing out ad catalogs (one per region and natural language) to available devices on a recurring basis.

“Downloading a catalog does not identify any user,” it writes. “As the user browses, Brave locally matches the best available ad from the catalog to display that ad at the appropriate time. Brave ads are opt-in and consent-based (disabled by default), and engineered to operate without leaking the user’s personal data from their device.”

It couches this approach as “a more efficient and direct opportunity to access user attention without the inherent liabilities and risks involved with large scale user data collection”.

Though there’s still a ways to go before Brave is in a position to prove out its claims — including several more testing phases.

Brave says it’s planning to run further studies later this month with a larger set of users that will focus on improving its user modeling — “to integrate specific usage of the browser, with the primary goal of understanding how behavior in the browser impacts when to deliver ads”.

“This will serve to strengthen existing modeling and data classification engines and to refine the system’s machine learning,” it adds.

After that it says it will start to expand user trials — “in a few months” — focusing testing on the impact of rewards in its user-centric ad system.

“Thousands of ads will be used in this phase, and users will be able to earn tokens for viewing and interacting with ads,” it says of that.

Brave’s initial goal is for users to be able to reward content producers via the utility BAT token stored in a payment wallet baked into the browser. The default distributes the tokens stored in a users’ wallet based on time spent on Brave-verified websites (though users can also make manual tips).

Though payments using BAT may also ultimately be able to do more.

Its roadmap envisages real ad revenue and donation flow fee revenue being generated via its system this year, and also anticipates BAT integration into “other apps based on open source & specs for greater ad buying leverage and publisher onboarding”.

PayPal-owned, peer-to-peer payments app Venmo is ending web support for its service, the company announced in an email to users. The changes, which are beginning to roll out now, will see the Venmo .com website phasing out support for making payments and charging users. In time, users will see even less functionality on the website, the company says.

The message to users was quietly shared in the body of Venmo’s monthly transaction history email. It reads as follows:

NOTICE: Venmo has decided to phase out some of the functionality on the Venmo.com website over the coming months. We are beginning to discontinue the ability to pay and charge someone on the Venmo.com website, and over time, you may see less functionality on the website – this is just the start. We therefore have updated our user agreement to reflect that the use of Venmo on the Venmo.com website may be limited.

The decision represents a notable shift in product direction for Venmo. Though best known as a mobile payments app, the service has also been available online, similar to PayPal, for many years.

The Venmo website today allows users to sign in and view their various transaction feeds, including public transactions, those from friends, and personal transactions. You can also charge friends and submit payments from the website, send payment reminders, like and comment on transactions, add friends, edit your profile, and more.

Some users may already be impacted by the changes, and will now see a message alerting them to the fact that charging friends and making payments can only be done in the Venmo app from the App Store or Google Play.

It’s not entirely surprising to see Venmo drop web support. As a PayPal-owned property after its acquisition by Braintree which later brought it to PayPal, there’s always been a lot of overlap between Venmo and its parent company, in terms of peer-to-peer payments.

Venmo had grown in popularity for its simple, social network-inspired design and its less burdensome fee structure among a younger crowd. This made it an appealing way for PayPal to gain market share with a different demographic.

It’s also cheaper, which people like. PayPal doesn’t charge for money transfers from a bank account or PayPal balance, but does charge 2.9 percent plus a $0.30 fixed fee on payments from a credit or debit card in the U.S. Venmo, meanwhile, charges a fee of 3 percent for credit card payments, but makes debit card payments free. That’s appealing to millennials in particular, many of whom have ditched credit cards entirely, and are careful about their spending.

Plus, as a mobile-first application, Venmo was offering a more modern solution for mobile payments, at a time when PayPal’s app was looking a bit long in the tooth. (PayPal has since redesigned its mobile app experience to catch up.)

Another factor in Venmo’s decision could be that, more recently, it began facing competition from newcomer Zelle, the bank-backed mobile payments here in the U.S. which is forecast to outpace Venmo on users sometime this year, with 27.4 million users to Venmo’s 22.9 million. In light of that threat, Venmo may have wanted to consolidate its resources on its primary product – the mobile app.

Not everyone is happy about Venmo’s changes, of course. After all, even if the Venmo website wasn’t heavily used, it was used by some who will certainly miss it.

@venmo i only use the website to send/receive payments so in guess you're cancelled!

Venmo email: “We are beginning to discontinue the ability to pay and charge someone on the https://t.co/iAFTbn3EY0 website, and over time, you may see less functionality on the website – this is just the start.”

Reached for comment, Venmo explained the decision to phase out the website functionality stems from how it sees its product being used.

A Venmo spokesperson told TechCrunch:

Venmo continuously evaluates our products and services to ensure we are delivering our users the best experience. We have decided to begin to discontinue the ability to pay and charge someone on the Venmo.com website. Most of our users pay and request money using the Venmo app, so we’re focusing our efforts there. Users can continue to use the mobile app for their pay and charge transactions and can still use the website for cashing out Venmo balances, settings and statements.

The company declined to clarify what other functionality may be removed from the website over time, but noted that using Venmo to pay authorized merchants is unaffected.

Truecaller doesn’t have WhatsApp -like scale — few companies can match 200 million active users in Indua, but it did recently disclose that it has 100 million daily active users worldwide, while India is its largest country with 150 million registered users.

Truecaller isn’t disclosing how much it has paid for the deal, but it said that Chillr’s entire team of 45 people will move over and the Chillr service will be phased out. In addition, Chillr CEO Sony Joy will become vice president of Truecaller Pay, running that India-based payment business which will inherit Chillr’s core features.

“We’ve acquired a company that is known for innovation and leading this space in terms of building a fantastic product,” Truecaller co-founder and CSO Nami Zarringhalam told TechCrunch in an interview.

Zarringhalam said the Truecaller team met with Chillr as part of an effort to reach out to partners to build out an ecosystem of third-party services, but quickly realized there was potential to come together.

“We realized we shared synergies in thought processes for caring for the customer and user experience,” he added, explaining that Joy and his Chillr team will “take over the vision of execution of Truecaller Pay.”

Truecaller added payments in India last year

Joy told TechCrunch that he envisages developing Truecaller Pay into one of India’s top three payment apps over the next two years.

Already, the service supports peer-to-peer payments following a partnership with ICICI Bank, but there are plans to layer on additional services from third parties. That could include integrations to provide services such as loans, financing, micro-insurance and more.

Joy pointed out that India’s banking push has seen many people in the country sign up for at least one account, so now the challenge is not necessarily getting banked but instead getting access to the right services. Thanks to gathering information through payments and other customer data, Truecaller could, with permission from users, share data with financial services companies to give users access to services that wouldn’t be able to access otherwise.

“Most citizens have a bank account (in each household), now being underserved is more to do with access to other services,” he explained.

Joy added that Truecaller is aiming to layer in value-added services over its SMS capabilities, digging into the fact that SMS remains a key communication and information channel in India. For example, helping users pay for items confirmed via SMS, or pay for an order which is tracked via SMS.

The development of the service in India has made it look from the outside that the company is splitting into two, a product localized for India and another for the rest of the world. However, Zarringhalam said that the company plans to replicate its approach — payments and more — in other markets.

“It could be based on acquisitions or partners, time will tell,” he said. “But our plan is to develop this for all markers where our market penetration is high and the market dynamics are right.”

Apple is fixing one of the worst parts of the concert experience: waiting in line for a beer while you miss your favorite song. Last week’s BottleRock music festival near San Francisco was the first to try a new “order ahead with Apple Pay” feature that Apple hopes to bring to more events. You just open the festival’s app, select the closest concession stand, choose your drinks, Apple Pay with your face or fingerprint and pick up the beverages at a dedicated window with no queue.

Check out our demo video below.

BottleRock’s upscale wine and oldies music fest, 100 miles from the tech giant’s headquarters, has become a testbed for Apple Pay. Last year, every concession stand got equipped with the Square’s Apple Pay-ready point of sale system and special fast lanes for customers who used it instead of cash or credit card. Thirty percent of all transactions at BottleRock were made with Apple Pay, according to an Apple spokesperson, proving people wanted a faster way to get back to the show.

With order ahead, your drinks are ready for pick up so you don’t even have to break your dance stride. Having gone to 14 Coachellas, I’d learned to forego booze rather than risk losing my friends or a chance to hear that hit single while stewing in the beer garden lines. But Apple Pay powered the best concert commerce experience I’ve had yet. I’m sure I’m not the only one who knocked back a few more drinks last weekend because it was so convenient.

That’s why I foresee music festivals jumping at the chance to integrate into their apps order ahead with Apple Pay. They and their vendors will see more sales, while attendees see more music. Meanwhile, it’s a smart way for Apple to reach a juicy demographic. Apple Pay is especially helpful when you’re in a rush, but festival goers will return home more likely to use it day-to-day.

Often times, music festival tech, like friend-finding apps and location-based alerts, can interrupt the moment. Apple Pay succeeds here by fading away, keeping you in harmony with the present.

Get ready to shop the ‘Gram. Instagram just stealthily added a native payments feature to its app for some users. It lets you register a debit or credit card as part of a profile, set up a security pin, then start buying things without ever leaving Instagram. Not having to leave for a separate website and enter payment information any time you want to purchase something could make Instagram a much bigger player in commerce.

TechCrunch reader Genady Okrain first tipped us off to the payment feature. When we asked Instagram, a spokesperson confirmed that native payments for booking appointments like at restaurants or salons is now live for a limited set of partners.

One of the first equipped is dinner reservation app Resy. Some of its clients’ Instagram Pages now offer this native payment for booking. And in the future, Instagram says you can expect direct payments for things like movie tickets through the app. Instagram initially announced in March 2017 that “we’ll roll out the ability to book a service with a business directly from their profile later this year,” but never mentioned native payments.

Instagram’s native appointment booking

We’ve confirmed that the payment settings are now visible; some, but not all, users in the U.S. have it while at least some in the U.K. don’t. A tap through to the terms of service reveals that Instagram Payments are backed by Facebook’s Payments rules.

With its polished pictures and plethora of brands, shopping through Instagram could prove popular and give businesses a big new reason to advertise on the app. If they can get higher conversion rates because people don’t quit in the middle of checkout as the fill in their payment info, brands might prefer to push people to buy via Instagram.

Instagram’s existing Shoppable Tags feature forces you out to a business’ website to make a purchase, unlike the new payments feature

Facebook started dabbling in native commerce around 2013, and eventually started rolling out peer-to-peer payments through Messenger. But native payment for shopping is still in closed beta in the chat app. It’s unclear if peer-to-peer payments might come to Instagram, but having a way to add a credit or debit card on file is a critical building block to that feature.

It’s possible that the payments option will work with Instagram’s “Shoppable Tags,” which first started testing in 2016 to let you see which products were in a post and tap through to buy them on the brand’s site. Since then, Instagram has partnered with storefront platforms BigCommerce and Shopify to get their clients hooked up, and expanded the feature to more countries in March. For now, though, none of Instagram’s previous shopping feature partners like Warby Parker or Kate Spade let you checkout within Instagram, and still send you to their site.

But the whole point of Instagram not allowing links in captions is to keep you in a smooth, uninterrupted browsing flow. Getting booted out to the web to buy something broke that. Instagram Payments could make impulse buys much quicker, enticing more businesses to get on board. Even if Instagram takes no cut of the revenue, brands are likely to boost ad spend to get their shoppable posts seen by more people if the native payments mean more of them actually complete a purchase.

One of the biggest headaches for freelance writers is the need to send an invoice for their work, then wait (and wait, and wait) for payment.

Matt Saincome, founder of the satirical punk-themed news site The Hard Times, knows this, which is why he’s launching a new payment product called Outvoice.

Saincome said he started out as a freelancer himself, and he recalled having to repeatedly ask an editor to get paid. When the check finally arrived, he tried to deposit it, only to find that it bounced, leaving him with a $35 fee — way more than the $12 that he was supposedly making.

Obviously, this is a problem for freelancers, but Saincome said that when he became an editor, he realized that it was a problem for editors too. And when he became a publisher, he realized, “Wait, this is a horrible problem for everyone.”

Sure, there may be some publishers who fully intend to rip off their writers, but for many others, it’s more an issue of not making the time to deal with all the invoices and send out the checks. And if they let this slip too badly, they may end up chasing some of their most talented writers away.

Outvoice is designed to streamline all that. For starters, it helps onboard freelancers by automatically presenting them with the forms and contracts that they need to fill out. Then it integrates with WordPress and Drupal, so that when an editor is publishing a story, they can select a contributor and a payment amount on the same screen. Once they hit publish, the freelancer gets paid — no invoice needed, no delays.

The product supports other kinds of working arrangements, too. If a publisher doesn’t pay freelancers on a per-article basis, but instead does it by the hour, the week or the month, they can still make payments through the Outvoice website.

In our initial interview, I also pointed out the fact that some freelancers actually publish their stories themselves. Then Saincome emailed me to say that his team added a feature to take care of that too — a freelancer can enter their own payment information as they publish, then the editor or publisher can approve the payment with a click. (Finally, someone takes my product advice!)

Saincome said the music site Consequence of Sound is testing the system out, as is The Hard Times itself. Just to be clear, however, Outvoice is a new company, separate from The Hard Times, that Saincome is launching.

Would being asked to pay Facebook to remove ads make you appreciate their value or resent them even more? As Facebook considers offering an ad-free subscription option, there are deeper questions than how much money it could earn. Facebook has the opportunity to let us decide how we compensate it for social networking. But choice doesn’t always make people happy.

Mark Zuckerberg insists that Facebook will remain free to everyone, including those who can’t afford a monthly fee, so subscriptions would be an opt-in alternative to ads rather than a replacement that forces everyone to pay

Partially decoupling the business model from maximizing your total time spent on Facebook could let it actually prioritize time well spent because it wouldn’t have to sacrifice ad revenue

The monthly subscription price would need to offset Facebook’s ad earnings. In the US & Canada Facebook earned $19.9 billion in 2017 from 239 million users. That means the average user there would have to pay $7 per month

However, my analysis neglected some of the psychological fallout of telling people they only get to ditch ads if they can afford it, the loss of ubiquitous reach for advertisers, and the reality of which users would cough up the cash. Though on the other hand, I also neglected the epiphany a price tag could produce for users angry about targeted advertising.

What’s Best For Everyone

This conversation is relevant because Zuckerberg was asked twice by congress about Facebook potentially offering subscriptions. Zuckerberg endorsed the merits of ad-supported apps, but never ruled out letting users buy a premium version. “We don’t offer an option today for people to pay to not show ads” Zuckerberg said, later elaborating that “Overall, I think that the ads experience is going to be the best one. I think in general, people like not having to pay for a service. A lot of people can’t afford to pay for a service around the world, and this aligns with our mission the best.”

But that word ‘today’ gave a glimmer of hope that we might be able to pay in the future.

Facebook CEO and founder Mark Zuckerberg testifies during a US House Committee on Energy and Commerce hearing about Facebook on Capitol Hill in Washington, DC, April 11, 2018. (Photo: SAUL LOEB/AFP/Getty Images)

What would we be paying for beyond removing ads, though?. Facebook already lets users concerned about their privacy opt out of some ad targeting, just not seeing ads as a whole. Zuckerberg’s stumping for free Internet services make it seem unlikely that Facebook would build valuable features and reserve them for subscribers

Spotify only lets paid users play any song they want on-demand, while ad-supported users are stuck on shuffle. LinkedIn only lets paid users message anyone they want and appear as a ‘featured applicant’ to hirers, while ad-supported users can only message their connections. Netflix only lets paid users…use it at all.

But Facebook views social networking as a human right, and would likely want to give all users any extra features it developed like News Feed filters to weed out politics or baby pics. Facebook also probably wouldn’t sell features that break privacy like how LinkedIn subscribers can see who visited their profiles. In fact, I wouldn’t bet on Facebook offering any significant premium-only features beyond removing ads. That could make it a tough sell.

Meanwhile, advertisers trying to reach every member of a demographic might not want a way for people to pay to opt-out of ads. If they’re trying to promote a new movie, a restaurant chain, or an election campaign, they’d want as strong of penetration amongst their target audience as they can get. A subscription model punches holes in the ubiquity of Facebook ads that drive businesses to the app.

Resentment Vs Appreciation

But the biggest issue is that Facebook is just really good at monetizing with ads. For never charging users, it earns a ton of money. $40 billion in 2017. Convincing people to pay more with their wallets than their eyeballs may be difficult. And the ones who want to pay are probably worth much more than the average.

Let’s look at the US & Canada market where Facebook earns the most per user because they’re wealthier and have more disposable income than people in other parts of the world, and therefore command higher ad rates. On average US and Canada users earn Facebook $7 per month from ads. But those willing and able to pay are probably richer than the average user, so luxury businesses pay more to advertise to them, and probably spend more time browsing Facebook than the average user, so they see more of those ads.

Brace for sticker shock, because for Facebook to offset the ad revenue of these rich hardcore users, it might have to charge more like $11 to $14 per month.

With no bonus features, that price for something they can get for free could seem way too high. Many who could afford it still wouldn’t justify it, regardless of how much time they spend on Facebook compared to other media subscriptions they shell out for. Those who truly can’t afford it might suddenly feel more resentment towards the Facebook ads they’ve been scrolling past unperturbed for years. Each one would be a reminder that they don’t have the cash to escape Facebook’s data mines.

But perhaps it’s just as likely that people would feel the exact opposite — that having to see those ads really isn’t so bad when faced with the alternative of a steep subscription price.

People often don’t see worth in what they get for free. Being confronted with a price tag could make them more cognizant of the value exchange they’re voluntarily entering. Social networking costs money to operate, and they have to pay somehow. Seeing ads keeps Facebook’s lights on, its labs full of future products, and its investors happy.

That’s why it might not matter if Facebook can only get 4 percent, or 1 percent, or 0.1 percent of users to pay. It could be worth it for Facebook to build out a subscription option to empower users with a sense of choice and provide perspective on the value they already receive for free.